Financial Results. Note Regarding Forward-looking Statements. Six Months Ended September 30, October 22, 2015

Transcription

1 TSE: 6594 NYSE: NJ Fiscal First-Half 215 Financial Results Six Months Ended September 3, 215 <U.S.GAAP> October 22, 215 Note Regarding Forward-looking Statements These presentation materials and the related discussions contain forward-looking statements including expectations, estimates, projections, plans and strategies. Such forward-looking statements are based on management s targets, assumptions and beliefs in light of the information i currently available. Certain risks, uncertainties i and other factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in customer circumstances and demand, d exchange rate fluctuations, ti and the Nidec Group s ability to design, develop, mass produce and win acceptance of its products and to acquire and successfully integrate companies with complementary technologies and product lines. Please see other disclosure documents filed or published by the Nidec Group companies, including the latest Form 2-F and Japanese securities report, for additional information regarding such risks and uncertainties. Nidec undertakes no obligation to update the forward-looking statements unless required by law. The photograph on the first slide features the large-sized servo press machine of Arisa, S.A., an Italy-based press machine manufacturer the company acquired in August

2 Consolidated Profit/Loss Millions of Yen, except for percentages, EPS and FX Rates 1H/FY214 1H/FY215 Change FY215 Forecast Net Sales 489, , % 1,15, Operating Income 51,923 5,93 61, % 13, Operating Income Ratio 1.6% 1.5% % Income before Tax 51,538 63, % 126, Net Income 36,713 47, % 9, EPS (Yen) % Dividend (Yen) FX Rates (Yen/US$) Average: Term end: % +9.6% 115. (Assumed) Note: Based on the current forecast of sales volume, every one yen appreciation or depreciation against the U.S. dollar and the euro for FY215 is estimated to have an annualized impact of 6.8 billion yen and 1. billion yen on sales, respectively, and.8 billion yen and.25 billion yen on operating income, respectively. This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 3 Summary of 1H/FY215 Record-high first half net sales, operating income, income before taxes and net income 3% increase in net income Y/Y Ten consecutive quarters of operating income increase following the structural reform in FY212 Seven consecutive quarters of net sales increase, reaching the 3 bil. yen mark for the first time 4

3 Consolidated Quarterly Net Sales and Operating Income Seven consecutive quarters of net sales increase and ten consecutive operating income increase Net Sales (LHS) Operating Income (RHS) Quarterly sales 3 bil. yen mark achieved (All figures in Billions of Yen) for the first time Net Sales 2 15 Japan 15 Earthquake Thai 1 Floods 1 2 Oper rating Inco ome 5 Lehman Crisis Structural Reform 5-5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY28 FY29 FY21 FY211 FY212 FY213 FY HDD Market Trend (1) Despite weak demand in HDD market, Nidec gains higher market share HDD Shipments Nidec Motor Shipments Previous FY215 Forecast (Jul. 22, 215) Revised FY215 Forecast (Oct. 22, 215) (Millions of Units) (Millions of Units) FY15/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q 4Q (Actual) (Forecast) (Forecast) (Forecast) (Actual) (Actual) (Forecast) (Forecast) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. (Nidec estimates based on various sources) 6

4 HDD Market Trend (2) Aiming to enhance profitability through capturing high-value-added product demand (Millions of Units) <HDD medium-term market estimate> HDD motors used for servers (nearline+enterprise), whose market is steadily growing, are priced higher and more profitable as necessity for difficult technical solutions increases Servers 2 Other applications (PC, external HDD, etc.) 1 '13 '14 '15 '16 '17 '18 '19 '2 (Calendar Year) (Nidec estimates based on various sources) 7 Strategy of Other Small Precision Motors Aiming to expand TAM* through replacement with brushless DC motors Customer-Specific, Application-Specific, i ifi Cross-Application Approach Cross-Customer Approach Based upon two basics above Switch everything to brushless DC approach Stepping motor market (9% of SPM* TAM**) <Examples of potential applications> OA equipment ATM <Future small precision motor market estimate> (% based on units) Others 13% 6% 17% AC Motors 11% Year 22 Approx. 12B units 9% BLDC (IT) Fans and browers Current coverage Brushed DC motor market (44% of SPM* TAM**) <Examples of potential applications> Auto OA equipment Home appliances Robotics Future coverage Brushed DC motors 44% Stepping motors *SPM: Small Precision Motors **TAM: Total Accessible Market (Nidec estimates based on various sources) 8

5 Midterm Prospect for Haptic Devices Expecting the market to grow to one billion units and hundreds of billion yen sales Aiming i to make this business another profitable pillar after HDD motors within Small Precision Motors <Global smartphone market> Low end to middle range / around 5% CY B units High end / around 5% Low-end to middle range / around 7% CY B units High-end / around 3% 1. Assuming all of high end smartphones would adopt the haptic technology 2. Assuming some high end adopting multiple devices Linear resonant actuator 1B units per annum (Estimate) (Nidec estimates based on various sources) 9 Mid-Term Focuses on Automotive and Appliance, Commercial & Industrial Aiming to strengthen businesses by implementing extensive structural reforms of profits <Mid-term outlook for Automotive> <Mid-term outlook for Appliance, Commercial and Industrial> (Billions of Yen) 1, (Operating Income (Billions of Yen) (Operating Income Ratio %) Ratio %) Sales (LHS) Operating Income Ratio (RHS) Sales (RHS) Operating Income ratio (RHS) 15 1, B to 1T 5 (incl. 5B of new M&A) B to 6B 1 5 FY214 FY215 FY216 FY217 FY218 FY219 FY22 FY214 FY215 FY216 FY217 FY218 FY219 FY22 <Principal measures in Automotive> 1. Win businesses with technological advantages (to make products light, thin, short and compact) 2. Enhance value added with modularization strategy 3. Promote full-fledged fledged in-house production of components by taking advantage of large order flows This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. <Principal measures in Appliance, Commercial & Industrial> 1. Use all possible strength and resources to achieve two-digit operating income ratio in overseas businesses 2. Consolidate, unify and streamline the operations comprehensively 3. Further strengthen after-sales market and service businesses 1

6 Future of Nidec Elesys FY225 Four key elements to achieve 2 billion yen sales target Expansion R&D (planned) India Nidec s test courses (Planned) 5% FY22 3, Employees Number of employees 1,8 (Target) Employees Europe China Sensors for ADAS* share (Target) 3% Core competence FY215 1, Employees ECU** for electric power steering share (Target) 3% Future of Nidec Elesys 3 OEMs *ADAS: Advanced Driving Assistance System **ECU: Electronic Control Unit IoT Innovation and Development Power-packs for EV Invertors for HEV/EV Electric pumps FY215 FY22 FY225 5B Yen+ 1B Yen+ 2B Yen+ 2 OEMs 4 OEMs Major OEM customers (Target) Sales (Target) New markets and new customers 11 Appliance Commercial & Industrial Focusing on Improvement of Profitability Aiming for urgent improvement in overseas businesses with the full utilization of the total Nidec group resources <Image of overseas business structure of Appliance, Commercial & Industrial> Nidec Sole Motor Nidec Mo otor EMG E.M.G. KB Electronics Nidec Kin netek Nid dec Motor Nidec Beijing Drive Motortecnica Nidec Avtron Automation Nidec ASI Nidec Motor Nidec Kine tek Global lbl Commercial il& Elevator Industrial Appliance Residential Solutions & Solutions Motors Solutions Drive Systems Road map for restructuring Appliance, Commercial & Industrial overseas businesses Focusing on early recovery of profitability 3. Accelerate business 2. Create expansion synergies 1. Solidify business structures FY15 FY16 FY17 Plan 1 Structural reform of profits jointly implemented by Head Office and overseas subsidiaries Plan 2 Joint cost reduction strategy with HQ purchasing and production engineering functions Plan 3 Pursuit of sales synergies 12

7 M&As in Fiscal First-Half 215 Six M&As in 1H FY215, filling gaps of existing businesses Closing May 215 Current Company s Name (Country) Motortecnica s.r.l. (Italy) Principal Business Annual Sales Remarks Designing, manufacturing, repairing, maintenance and servicing of electric generators and motors with focus areas of remanufacturing and refurbishment EUR 11 mil. (December 214) Acquisition July 215 Nidec (Beijing) Drive Technologies (China) Designing, developing, manufacturing and marketing of switched reluctance (SR) motors and drives RMB 5 mil. (December 213) Acquisition of SR motor and drive business August 215 Arisa, S.A. (Spain) Developing, manufacturing, sales and aftermarket services of large-sized servo press machines EUR 2.4 mil. (December 214) Acquisition August 215 KB Electronics, Inc. (US) Designing, manufacturing and sales of AC and DC electric motor drives and controllers for three-phase fan motors USD 23 mil. (September 214) Acquisition September 215 E.M.G. Elettromeccanica S.r.l (Italy) Developing, producing and sales of motors for commercial facilities (swimming pools and spas, and air or smoke ventilations), household appliances and industrial equipment (brake motors) EUR 1.4 mil. (December 214) Acquisition of business assets September 215 PT. Nagata Opto Indonesia (Indonesia) Glass lens processing USD 3.9 mil. (December 214) Acquisition 13 Synergy Strategy Example (Acquisition of Arisa) Complementing our global businesses in both applications and regions Appli ications Region ns Arisa Nidec Minster Nidec- Shimpo Group Home Appliances Electronic Components (Connectors, lead frames) Motor Core Cans (Food and beverage) Automotive (Body) Automotive (Parts) Japan North America Europe China Nidec s M&A 1) Transformation and expansion of business portfolio 2) Time-based competitiveness markets, customers, products, technologies, production facilities and human resources 3) Focus on post merger integration Other Asian Countries 14

8 Exploring New Businesses Under the Initiative of Chief Technology Officer Aiming to create businesses with hundreds of billion yen sales in FY22 Cyber World Big Data Fusion Sensor Collecting big data Example 1 Example 2 Example 3 ** AGV business Pump system business FA/Automation businesses AI Forecast & optimization based on data analysis Smart AGV* transfer robot Materialize guideless AGVs* Solar pump system Smart factory Materialize agricultural lsupport Productivity improvement/labor IoT Controller saving/quality control thru automation Solar panel Power conditioner Pump Real World *AGV: Automatic Guided Vehicle **AI: Artificial Intelligence 15 Establishment of Nidec Center for Industrial Science (October 215) Leading the realization and improvement of materials in manufacturing, engineering methods, robotics and automatic processing equipment Short-term goal Short-term and near future product development and improvement of production engineering Mid- to longterm goal Develop fundamental production engineering which could support 1 trillion yen sales in FY23 Joint projects based on actual needs New Business Development Dept. Nidec Center for Industrial Science Vision Information Interaction with external network University Business departments Affiliates Structure Mechatronics Assembly Production process University Research institute t Nidec Research & Development Center Production Engineering Center Processing Molding Materials Evaluation Company 16

9 TSE: 6594 NYSE: NJ Automotive Business 17 October 22, 215 Automotive Business Vision Aiming to achieve overwhelming growth by taking advantage of rapidly advancing electrification Automotive Business Vision Contributing to realization of safe, comfortable and environmentally conscious society through electrification in which motors play a key role Global environment Customer orientation Technological innovation Creating additional value in collaboration by adapting to changes in market and customer requests promptly and flexibly Taking the technological innovations in automotive field as a growth opportunity, and pursuing future technologies by unifying the group s capabilities 18

10 Business Environment : Global Mega Supplier Numerous players exceeding one trillion yen sales (Sales per annum in Trillions of Yen) 5 4 Targeting 1 trillion yen sales in 22 (Target) (Organic growth and M&A growth) Magna Internati Robert Bosch Continental Denso ZF Friedrichsha Faurecia Aisin Seiki Hyundai Mobis Valeo Delphi Automot Lear Johnson Contro Schaeffler ThyssenKrupp Yazaki Sumitomo Elect Huayu Automot Autoliv Toyota Industri JTEKT Mahle Automotive & I Toyota Boshoku Magneti Marell lli ei Calsonic Kanse Tenneco Gestamp Autom Nidec (Target fo Benteler Interna hafen ational s ols otive ctric Industries otive Systems ies Weichai Power mocion Nidec (Actual Result for 214) for 22) national Industrial Systems C Company This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. (Nidec estimates based on various sources) 19 Business Environment: Changing Competitive Landscape Investments are accelerating in powertrain/safety technologies which lead to future autonomous driving (ZF s acquisition of TRW followed by Magna s acquisition of Getrag) <Tier 1 Top 1 Sales in 29> <Tier 1 Top 1 Sales in 214> Denso Robert Bosch Robert Bosch Magna International * * Acquired Getrag Aisin Seiki ZF ** ** Acquired TRW Continental Johnson Controls Changes in sales ranking due to large acquisitions Denso Continental Magna International Hyundai Mobis Faurecia Aisin Seiki Delphi Automotive Faurecia TRW Johnson Controls ZF (Millions of US Dollars) Lear (Millions of US Dollars) 25, 5, 25, 5, (Nidec estimates based on various sources) 2

11 Automotive Business Trend (1) Auto parts clearly l being polarized on the back of the electrification trend on this side Commoditized products (hard to survive) 1) Hydraulic parts 2) Mechanical parts, etc. Accelerated market consolidation Expected to integrate with electric components to survive High-value added products 1) Motors, Actuators 2) ECUs 3) Sensors incl. cameras 4) Batteries 5) Materials Electrification of automotive parts Environment Safety System reforms boosted through enhanced environmental regulations across the world Improvement of safety functions with electronic control Comfort, Electrification of general equipment, improvement Convenience of information and communication equipment 21 Automotive Business Trend (2) Customers accelerating to switch over to suppliers with global supply capabilities Competitor A Competitor B Competitor C Competitor D Competitor E Competitor F Competitor G Brushless motor comprehensive strength Global supply capability Scale Quality Cost competitiveness Power-pack development capabilities ー ー ー 22

12 Mid-Term Business Plan Targeting 1 trillion yen sales and double-digit operating income ratio in FY22 (Sales in Billions of Yen) (Operating Income in Billions of Yen) 1, New M&A (LHS) Organic Sales (LHS) 1, Operating Income (RHS) FY14 FY15 FY16 FY17 FY18 FY19 FY2 (Forecast) (Target) (Target) (Target) (Target) (Target) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 23 Automotive Products Nidec steadily building its product lineups since the mid-199s Chassis ADAS (Advanced Driving Assistance Systems) Body Electric power steering motors & ECU Lane keep assistant system (LKAS) unit Millimeter wave radar unit Camera module for sensing camera Surround view camera lens units ADAS (Advanced Driving Assistance Systems) Rearview camera module Occupant detection system (ODS) unit Body Head-up display (HUD) Car Seat haptic audio/navigation motor system cooling fans ABS/EPS motors ABS ECU Suspension oil valve control stepping motors Powertrain Chassis Seat air conditioning fans Seat adjuster motors AT/CVT control Solenoid valve Dual cluch transmission actuators Transmission oil pumps / Pump motors Switches Spool Transmission oil pump Conventional water pump Switchable water pump Variable water pump Module Automotive door mirror parts, Audio panel, Switch parts Rivet contacts for automotive relays Rivet contacts for automotive relays Engine cooling fan motors Geared motors for engine mount Idle speed control stepping motors Base bracket for oil cooler Heat-Resistant Products Powertrain Geared motor for active grille shutters Motors for headlight levelizer Window lift motors Sunroof motors Door lock module Trunk open motors 24

13 Product Strategy Launching products based on our technologies nurtured through IT experiences to make things light, thin, short and compact Example 1 Power-packs for electric power steering Superior cost competitiveness of brushless motors to brushed motors World s smallest Example 3 Technology to make motors light, thin, short and compact Example 2 Millimeter wave radar/camera integrated sensor fusion Enabling millimeter wave radar to fit in vehicle interior Electric water pump modules W ld Developed world s smallest and lightest product with our unique technologies: power-packs combining motors+pumps+ecus World s smallest World s smallest 25 Strategy (1): Power-Packs for Electric Power Steering Introducing new products for Column Type EPS expected to grow significantly Aiming to replace brushed motors with our strategic brushless motors in Column Type and to expand brushless business further to dominate the market <EPS* market estimate (by type)> (Millions of Units) 8 Electrically powered hydraulic steering 7 Rack Type 64 Pinion Type Column Type CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY2 *EPS: Electric Power Steering (Nidec estimates based on various sources) 26

14 Strategy (2): Next-Generation Braking System The market expected to grow fast in response to demand for safety 1 OEMs agreed to make automatic emergency braking (AEB) a standard feature on new vehicles in the U.S. A motor serves as the key component for the next- generation braking system to which Nidec can apply its EPS motor technologies. (Millions of Units) 2 15 <ADAS market estimate> Millimeter wave radar/camera integrated sensor fusion CY16 CY17 CY18 CY19 CY2 Motors for nextgeneration braking system (Nidec estimates based on various sources) 27 Strategy (3): Electric Water Pump Modules Providing environmentally conscious solution: significant improvement in energy efficiency of cooling water circulation Integrating Nidec s motors with Nidec GPM s pumps and Nidec Elesys s ECUs. Introducing EWP* modules created through putting group companies technologies together. Environmental contribution (1): Improvement of fuel efficiency (Millions of Units) <EWP* market estimate> t CY15 CY16 CY17 CY18 CY19 CY2 34 Mechanical pump Electric pump From belt drive to motor drive Environmental contribution (2): More parts requiring cooling as electrification advances Cooling for HEV/EV inverters HEV/EV motors Turbo chargers *EWP: Electric Water Pump (Nidec estimates based on various sources) 28

15 Strategy (4): Electric Oil Pump Modules Providing environmentally conscious solution: significant improvement on energy efficiency of transmission oil pumps Combined energy efficient motor of Nidec, low noised pump and high functional inverter of Nidec Tosok. Introducing electric oil pump modules created through unifying superior Nidec group technologies. Environmental contribution: Improvement of fuel efficiency (Millions of Units) <EOP* market estimate> t 5 11 CY16 CY17 CY18 CY19 CY Mechanical pump Electric pump p Switching the power source from engines to electric motors IS & CS & SS**: Intentionally stopping engines to save energy Shifting gears in DCT***: Reducing energy loss by switching from mechanical pumps to electric pumps Cooling down driving motors in HEV/EV: By keeping traction motor s temperature stable, will assist its energy efficiency i **IS: Idling Stops, CS: Coasting Stops, SS:Sailing Stops *EOP: Electric Oil Pump ***DCT: Dual Clutch Transmission (Nidec estimates based on various sources) 29 Advancing In-House Production Large orders from Mega-Platform provide great opportunities i to enhance in-house production, critical for improving profitability < Global l Network> * NMA Poland Nidec (Dalian) Nidec Elesys NMA Germany NMA Spain * * Nidec (Zhejiang) Nidec Sankyo CMI Nidec GPM (Suzhou) Nidec GPM (Germany) Nidec Automobile Motor (Zhejiang) Nidec Elesys (Zhongshan) Example of in-house products (1) Nidec Automotive Motor (Juarez) Nidec Tosok (San Luis Potosi) Nidec India (1) Die cast (2) Shaft (Flange (3) housing) (2) Shaft (3) Core (4) (4) Busbar Brush card (1) Resin mold Nidec Elesys Americas Nidec Elesys (Thailand) Nidec GPM (Brazil) *NMA: Nidec Motors & Actuators Nidec Tosok (Vietnam) (Die casting) Nidec Tosok (Vietnam) (Auto Parts) 3

16 Nidec IR Contacts Japan Tel: U.K. Tel: U.S. Tel: *Notes: Pursuant to FASB Accounting Standards Codification (ASC) 85 Business Combinations, consolidated financial statements for the previous year and the three months ended June 3, 215 have been retrospectively adjusted to reflect its valuation of the fair values of the assets acquired and the liabilities assumed upon the acquisitions of Nidec GPM GmbH (formerly Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt) in the fiscal year ended March 31, 215. During the three months ended September 3, 215, Nidec completed its valuation of such assets and liabilities of Nidec GPM GmbH. Nidec logo is a registered trademark or a trademark of Nidec Corporation in Japan, the United States and/or certain other countries. All for dreams logo is a registered trademark of Nidec Corporation in Japan, and a trademark in the United States and/or certain other countries. 31 Appendix Performance Trends & Product Group Overview 32

17 Net Sales by Product Group (Apr-Sep FY215) Electronic & Optical Components Camera shutters, switches, trimmer potentiometers, processing, precision plastic mold products Machinery Industrial robots, circuit board testers, high-speed pressing machines, chip mounters, measuring equipment, power transmission equipment, factory automation system, card readers Automotive, Appliance, Commercial and Industrial 47.% Products Others 9.1% (9.2%).4% (.7%) Appliance Commercial Industrial 23.8% (25.6%) Parenthetic percentages represent FY214 mix Services, musical products 5.5% 37.9% (6.6%) 587.4B HDD Motors 18.2% Auto 23.2% (19.%) (19.1%) 19.7% (19.8%) Small Precision Motors (38.9%) Other Small Motors Optical disk drive motors, OA equipment motors, polygon scanners, MPU cooling fans, game machine fans, PC/communications equipment fans, home appliance fans, automobile fans, vibration motors, brush motors, (44.6%) stepping motors, actuator units 33 CAPEX, Depreciation, R&D (Billions of Yen) CAPEX Depreciation R&D 9. Full-Year Forecast Full-Year Forecast Full-Year Forecast 1H Actual 3.4 1H Actual H Actual FY213 FY214 FY215 FY213 FY214 FY215 FY213 FY214 FY215 34

18 Financial Highlights <Consolidated Sales & Operating Income> (Billions of Yen) Sales Operating Income Operating Income Ratio (%) % 1.8% 1.9% 11.% 1.8% % <Consolidated Income Before Tax & Net Income> (Billions of Yen) Consolidated Income Before Tax Consolidated Net Income Q/FY14 2Q 3Q 4Q 1Q/FY15 2Q <Dividends and EPS> (Yen/share) Year-end Interim Consolidated EPS (Full-year) 33 (Target) (Target) Q/FY14 2Q 3Q 4Q 1Q/FY15 2Q <Consolidated Cash Flow> (Billions of Yen) Operating Activities Investment Activities Free Cash Flow FY13 FY14 FY15 1H/FY13 1H/FY14 1H/FY15 *Please refer to Notes on page Product Group Overview <Small Precision Motors> (Billions of Yen) Sales Operating Income <Automotive, Appliance, Commercial & Industrial products> (Billions of Yen) Sales Operating Income *Please refer to Notes on page * * 1.8* 1.6 FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q <Machinery > (Billions of Yen) Sales Operating Income FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q <Electronic and Optical Components> (Billions of Yen) Sales Operating Income FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 36

19 Mid-Term Strategic Goal Vision 22 This section includes forward-looking statements. See disclaimer on page 2 of this presentation. 37 FY22 New Mid-Term Strategic Target Continuous pursuit of profit & strong growth 1. Target for consolidated d net sales: 2 trillion yen (including new M&A of approx. 5 billion yen) 2. Sales target for automotive: 7 billion to 1 trillion yen 3. Target for consolidated operating income ratio: 15% 4. Target for ROE: 18% (Assuming shareholders equity ratio of 6%) 5. Five regional HQ management This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 38

20 Targets for Net Sales and Operating Income Ratio Aiming for both sales growth (organic + M&A) and profitability enhancement (Net Sales in Trillions of Yen) (Operating Income Ratio, %) % % Net Sales 571.6B Net Sales 676.B 13.7% Net Sales 682.3B 1.7% 1.8% 9.7% Net Sales 79.3B Net Sales 875.1B 11.3% Organic Growth + M&A (CAGR approx. 12%) Net Sales 1.15T Net Sales Organic growth 1.3T (CAGR approx. 7%) Net Sales 2T New M&A Approx.5B % FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY2 Structural (Forecast) (Target) Reform 39 This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. Pursuing Both Strong Growth with Profit and Financial Soundness (Billion yen) 1,5 1,2 Targeting operating income ratio of 15% and ROE of 18% while sustaining and improving financial soundness *Please refer to Notes on page pg 31. (The average ROE during the ten years through FY214 was 12.2%) Positive net cash by (%) Shareholders Equity (LHS) ROE (RHS) March 216 in sight 6.% 65% Shareholders Equity Ratio (RHS) Operating Income Ratio (RHS) Shareholders equity ratio 54.9% 6% surpassed 5% one year 55% ahead of plan 49.1% Equity Ratio 47.5% 46.2% 44.4% The three elements for 5% % ROE improvement 41.3% Net profit on sales 45% Total asset turnover Financial leverage % 8.9% % 15.% 13.9% 13.7% % 1.7% % 2.% % 9.7% 12.% 1.8% ROE Operating Income Ratio 18% FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY2 Lehman Structural (Target) Crisis Reform Japan Credit Rating Agency, Ltd. (JCR) upgraded our long-term issuer This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. rating by one notch from A+ to AA- as of Oct. 1, % 2% 15% 1% 5% %

21 Business Structure to Support Profitable Global Growth Matrix management structure with five regional HQ Strengthening bases for growth strategy Global organic growth Accelerating post merger integration of overseas acquisitions iti Management function by business Small Appliance, Auto- Precision Commercial motive Motors & Industrial Other Product Groups 2. China Regional HQ began operating in Jan Asia From individual management by country to regional integration 4. Americas Regional HQ began operating in Oct 214 5EMEA 5. Reorganization registration filed in Mar 215 Region nal corpora ate function n by region and function 1. Japan 2. China 3Ai 3. Asia (TBD) 4. Americas 5. EMEA * Roles of regional Headquarters 1. Improve management quality (Governance, Compliance, Internal Control) 2. Improve management efficiency (High quality & cost effective shared services) 3. Proactive PMI support for acquired companies * EMEA: Europe, the Middle East and Africa 41 Targets for Net Sales in FY22 by Category Accelerate topline growth with focused allocation of management resources in fast growing areas driven by technological innovations (Sales: Billions of Yen) FY22 Net Sales: 2 Trillion Yen (Target) 7B to 1 T FY21 Net Sales: 676. Billion Yen FY215 Net Sales: 1.15 Trillion Yen (Forecast) New M&A 5 (Sales: Billions of Yen) (Sales: Billions of Yen) 4 to 6 4 to 6 4 Key Growth Areas Small Precision Motors 69.2 Automotive 94.2 Appliance, Commercial & Industrial Other Product Groups 3 28 Small Precision Motors Automotive Appliance, Commercial & Industrial 17 Other Product Groups Small Precision Motors Automotive Appliance, Commercial & Industrial 2 to 3 Other Product Groups This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 42

22 FY215 Sales and Profitability Targets by Product Category Small Precision Motors (Net Sales in Billions of Yen) Appliance, Commercial & Industrial (Operating Income in Billions of Yen) 4 to 6 FY11 FY12 FY13 FY14 FY15 FY2 (Forecast) (Target) 12 Automotive *Please refer to Notes on page 31. (Net Sales in Billions of Yen) (Operating Income in Billions of Yen) 1T 1.T 4 12 Yen to T FY11 FY12 FY13 FY14 FY15 FY2-2. (Forecast) (Target) -2-6 Other Product Groups (Operating Income in (Operating Income in (Net Sales in Billions of Yen) Billions of Yen) (Net Sales in Billions of Yen) Billions of Yen) to to FY11 FY12 FY13 FY14 FY15 FY (Forecast) (Target) FY11 FY12 FY13 FY14 FY15 FY (Forecast) (Target) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 43 6